Meredith Corporation
Q3 2022 Earnings Call Transcript

Published: 10 Feb 2022

[Operator:]

Good day, ladies and gentlemen, and welcome to the Medexus Pharmaceuticals Third Quarter 2022 Earnings Call. [Operator Instructions]

[It is now my pleasure to turn the floor over to your host, Victoria Rutherford. Ma'am, the floor is yours.:]

[Victoria Rutherford:]

Thank you, and good morning, everyone. Welcome to the Medexus Pharmaceuticals Third Quarter Fiscal 2022 Earnings Call. On the call this morning are Ken d'Entremont, Chief Executive Officer; and Marcel Konrad, Chief Financial Officer. If you have any questions after the conference call or would like further information about the company, please contact Adelaide Capital at [phone].

[I would like to remind everyone that this discussion will include forward-looking information that is based on certain material factors or assumptions and is subject to risks and uncertainties that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. In addition, during the course of this call, there may also be references to certain non-IFRS financial measures, including references to adjusted net loss and adjusted EBITDA, which do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. For more information about both forward-looking information and non-IFRS financial measures, including a reconciliation of each adjusted net loss and adjusted EBITDA to net loss, please refer to the company's management discussion and analysis, which, along with the financial statements, are available on the company's website at www.medexus.com and the company's corporate filings on SEDAR at www.sedar.com.:]

[I would now like to turn the call over to Ken d'Entremont.:]

[Kenneth d'Entremont:]

Thank you, Victoria. Good morning, everyone. Thanks for joining us on the call today. We've got some prepared statements that we'll read and then be happy to take questions at the end.

[In the third quarter of fiscal 2022, we achieved revenue of $21.3 million compared to $17.9 million in the second quarter of fiscal 2022, and $24.3 million in the quarter ending December 31, 2020, or the previous year. Revenues during Q3 were positively impacted by stronger IXINITY sales quarter-over-quarter as we began to see the results of the channel correction we initiated a few quarters ago. This improvement was partially moderated by the typical seasonality we have in our portfolio, specifically with Rupall sales, which reflected a severe allergy season in Canada, and then as expected, returned to normal levels in the fall.:]

[Adjusted EBITDA was positive at $1.9 million compared to negative $2 million in Q2 and compares to $3.9 million for Q3 last year. This improvement from Q2 also reflects the improvements we have seen in IXINITY, in particular in the manufacturing process, which we will touch on later in the call as well as the reduction of expenses in Q3.:]

[Our net loss of $1.2 million compared to a net loss of $12.8 million for the same period last year. Our Q3 figure included a non-cash unrealized gain of $2.2 million on the fair value of the embedded derivatives in our convertible debentures, which was driven by a change in our share price at the end of the applicable periods. Our adjusted net loss, which adjusts for these unrealized losses or gains, was $3.4 million compared to $0.4 million for the same period last year.:]

[Our net cash flow was $1.4 million in the period compared to a use of $2.9 million for the same period last year. And at December 31, 2021, we had $9.6 million in cash and cash equivalents with $10.1 million of total available liquidity.:]

[Turning to our specific product lines, we saw a sequential quarter-over-quarter improvement overall in our core business and are excited about the new and potential additions to our product portfolio, which we believe will generate growth momentum over the coming years. During the quarter, we saw a recovery in IXINITY sale that validates our recent initiatives to reset the supply chain and selling process over the last few quarters. And our unit market demand figures suggest a moderate level of patient conversions on top of a stable existing base of patients.:]

[We're also continuing to invest in a Phase 4 pediatric study that, if successful, will expand the IXINITY product label to include the pediatric population of patients under 12 years of age with hemophilia B. During Q3, we completed enrollment in our trial, and the trial is expected to be completed by June of 2022 this year. Once completed, a successful study could support an expansion of the indicated patient population for IXINITY, and we are exploring approaches to address this potential -- potentially expanded market.:]

[Rupall saw strong and continued unit demand growth of 30% for the trailing 12 months ended December 31, 2021, continuing its trend as one of the fastest growing antihistamines in the Canadian prescription market. Again, this growth reflects a severe allergy season across Canada and physicians increasingly switching patients to Rupall from either the generic prescription antihistamines or over-the-counter products.:]

[Turning to Rasuvo, a once-weekly subcutaneous single-dose auto-injector of methotrexate indicated for the treatment of rheumatoid arthritis, psoriasis and juvenile idiopathic arthritis. On a unit sold basis, Rasuvo continued to maintain, and in fact, slightly increase its market share in the United States in the trailing 12 months ended December 31, 2021. However, product revenue was negatively impacted by a decrease in the effective unit level prices we implemented during this period to defend our strong market share in light of increased competition in the branded methotrexate market.:]

[Metoject is a prefilled syringe of methotrexate, which is indicated for the treatment of rheumatoid arthritis and psoriasis. Even with the generic entry into the Canadian market in 2020, Metoject had a unit demand increase of 8% for the trailing 12 months ended December 31, 2021. Again, product revenue was negatively impacted by a similarly motivated decrease in effective unit level prices.:]

[As we have discussed in the past, we continue to be excited about treosulfan. We expect that it will become a leading agent in the use -- for use in conditioning regimens as part of allogeneic hematopoietic stem cell transplantation protocols that thankfully abbreviated allo-HSCT. This is a therapeutic area of great strategic interest for us.:]

[In June of 2021, we received Notice of Compliance from Health Canada to commercialize treosulfan, which we currently market in Canada under the trade name Trecondyv. We have entered into an exclusive license with medac GmbH to commercialize treosulfan in Canada and now have fully launched in the Canadian market.:]

[We also entered into an exclusive license with medac in February 2021 to commercialize treosulfan in the United States. As we have previously discussed, on August 2, 2021, we were notified by medac of a complete response letter from the U.S. Food and Drug Administration relating to the new drug application for the use of treosulfan in the United States. We participated in medac's Type A meeting with the FDA on November 23, 2021, to review medac's resubmission plan. Following that meeting, and based on our discussions with medac, our view is that there is a path towards approval that does not involve completing an additional Phase III study, provided that medac delivers to the FDA materials that address the FDA's outstanding issues set out in the CRL. The NDA resubmission is currently expected to occur in the second quarter of 2022 with a final FDA decision expected 2 to 6 months after the NDA resubmission, timing that is substantially consistent with our previous estimates.:]

[We continue to believe that treosulfan could eventually overtake the current market-leading product in the U.S., busulfan, which realized $126 million in the U.S. sales prior to genericization. In the meantime, we do not expect to make additional milestone payments to medac until we have received FDA approval.:]

[In addition to our current product portfolio, we also have a right of first refusal on current products from medac, the previous owner of Medexus U.S. We believe that several of these products represent a promising commercial opportunity in North America, and we are in the process of assessing the licensing of these products. We are also in discussion with several partners regarding other licensing opportunities that we believe have the potential to materially contribute to the revenue over the next few years.:]

[A key component of our growth strategy will be to continue to leverage our infrastructure through new product acquisitions and partnerships. We are exploring a number of opportunities, including a portion of the deal pipeline in the negotiation phase in both the U.S. and Canada. We will continue to look at optimizing our portfolio and leveraging our resources with the goal of exceeding near term -- of executing near-term accretive transactions to achieve our sales growth targets over the coming years. We aim to continue to grow revenue, leverage our North American sales force across products, realize synergies from our predecessor companies and maintain strict financial discipline. In summary, we believe we have built a highly scalable business model which should provide significant incremental earnings potential.:]

[I will now turn the call over to Marcel, who will discuss our financial results in more detail. Marcel?:]

[Marcel Konrad:]

Yes. Absolutely. Thanks, Ken.

[Total revenue was $21.3 million and $56.4 million for the 3- and 9-months periods ended December 31, 2021, respectively, compared to revenue of $24.3 million and $62 million for the 3- and 9-months period ended December 31, 2020. Revenue for the quarter benefited from end-of-year wholesale buying by approximately $2 million. The comparative revenue period in 2020 similarly benefited from over $2.5 million in IXINITY revenues that was collected in October of 2020 versus September 2020 as expected due to a delay in receipt of finished product from our contract manufacturing partner. We expect that timing of large orders like these will continue to affect quarter-to-quarter comparisons of our revenues.:]

[Gross profit was $11.5 million and $27.8 million for the 3- and 9-months periods ended December 31, 2021, respectively, compared to gross profits of $12.7 million and $33.2 million for the same period last year. The decline for the 9-month period ended December 31, 2021, was due in part to an increase in cost of goods sold caused by additional expenses related to failures during the IXINITY manufacturing process in the quarter ended June 30, 2021, as previously disclosed.:]

[The gross margin was 54.1% and 49.3% for the 3- and 9-months periods ended December 31, 2021, respectively, compared to 52.2% and 53.5% for the 3- and 9-month periods ended December 31, 2020. For the most recent quarter, we are encouraged to see initial results of improvements made to IXINITY manufacturing. The investments we made in people and in the manufacturing process are beginning to show good results.:]

[Selling and administrative expenses was $10.7 million and $34.1 million for the 3- and 9-months periods ended December 31, 2021, respectively, compared to $9.4 million and $25.9 million for the 3- and 9-months periods ended December 31, 2020, respectively. The increase over the comparative periods reflect important investment in our personnel and infrastructure to support our anticipated growth going forward, including preparation for the commercial launch of treosulfan in the United States. We reacted quickly to defer or cancel any further significant expenditures related to the treosulfan launch after receiving notice of the CRL on August 2, 2021. However, we believe that the CRL provides a path to review and approval and therefore have continued to incur some expenses in anticipation of treosulfan's eventual commercial launch.:]

[Research and development was $1 million and $5 million for the 3- and 9-months periods ended December 31, 2021, respectively, compared to $1.2 million and $2.6 million for the 3- and 9-months periods ended December 31, 2020, respectively, as we continue to fund the IXINITY pediatric study, which is now 100% enrolled.:]

[Adjusted EBITDA for the 3- and 9-months periods ended December 31, 2021, was $1.9 million and minus $5 million, respectively, compared to $3.9 million and $9.8 million for the 3- and 9-months periods ended December 31, 2020. Adjusted EBITDA of $1.9 million reflects an increase from the minus $2 million of the second quarter in our fiscal year 2022. Sequential quarterly improvement was primarily attributable to improved IXINITY net sales in the third quarter and the reduction of expenses. As mentioned earlier, the company's recent inventory management and manufacturing process modernization initiatives have also started to produce positive results.:]

[The 3- and 9-months periods ended December 31, 2021, saw a year-over-year decrease in adjusted EBITDA due to the impact of the IXINITY manufacturing failures during the 3 months ended June 30, 2021; the large increase in research and development costs over the comparative period; and the significant investments we made to improve our capacity for future business development and prepare for the anticipated commercialization of treosulfan in the United States.:]

[Net income for the 3- and 9-months periods ended December 31, 2021, was minus $1.2 million and $2.4 million, respectively, compared to net loss of $12.8 million and $17.8 million for the same period last year. We included in net income or loss is a non-cash unrealized gain or loss on a fair value of the embedded derivatives in our outstanding convertible debentures, which are sensitive to amongst other fluctuations of our share price. We believe that adjusted net income or loss, which excludes the impact of unrealized gains or losses on the fair value of derivatives, provides a better representation of performance of our operations because it excludes non-cash fair value adjustments and liabilities, which may be settled for shares.:]

[Our adjusted net loss for the 3- and 9-months periods ended December 31, 2021, was $3.4 million and $19.4 million, respectively, compared to $0.4 million and $2.5 million for the 3- and 9-months periods ended December 31, 2020.:]

[Cash and cash equivalents was $9.6 million at December 31, reflecting an increase of $1.4 million during Q3 and a decrease of $9.1 million over the first 3 quarters of fiscal 2020. Our available liquidity was $10.1 million at December 31, 2021, which consisted of $9.6 million in cash and cash equivalents and an undrawn credit of $0.5 million available under our ABL facility. We are continually exploring various financial strategies to enhance our liquidity to support our execution of our business plan that includes an eventual launch of treosulfan in the United States. We are exploring various options to bolster our liquidity both pre- and post-FDA decision, including to fund any milestone payment announced that may become payable as a result of the FDA decision. As mentioned during previous earnings results, no further milestone payments will be owed to medac unless and until FDA approval of treosulfan is obtained. Furthermore, we want to reiterate to investors that we do not expect this year or treosulfan to result in any default on our credit facility.:]

[Kenneth d'Entremont:]

Operator, we'll now open the call to questions.

[Operator:]

[Operator Instructions] Your first question for today is coming from Andre Uddin.

[Andre Uddin:]

Research Capital. Looks like IXINITY inventory issues are now resolved, which is good to see. Just looking at the pediatric IXINITY trial results. Are those going to be coming out this June, or when should we expect that data?

[Kenneth d'Entremont:]

Yes. Thanks, Andre. Good question. So the last patient dosed will be June of this year, and then it will likely take about 6 months to prepare the results for submission.

[Andre Uddin:]

And just obviously, there's lots of stuff going on here in Canada. I'm just wondering if you foresee any supply chain issues with your business given the current order closures. Maybe you could just talk a little bit about that.

[Kenneth d'Entremont:]

No, we don't. We -- since the beginning of the pandemic, we've been seeking to hold significant inventory on hand, many months. We shoot for 6. And so temporary delays don't affect us. It certainly is much more challenging to move product. It costs more and it takes more time. But because of the safety stock we've got built in, it hasn't affected us. We haven't had any significant backorders.

[Operator:]

Your next question is coming from Scott Henry.

[Scott Henry:]

ROTH Capital. Couple questions. First, did you disclose what products had the $2 million order at the end of the quarter?

[Kenneth d'Entremont:]

I don't believe we did, but it was IXINITY. And so as we've been describing, we have been resetting the channel to whatever we think we -- we anticipate the right level is. We were somewhat surprised that that order came in. We didn't think that that customer wanted to hold that much inventory, but they do, and so we filled it. So we ended up with a higher quarter than we expected. So we'll see what happens this quarter. I think the good news is that demand matched its factory revenue this quarter for IXINITY. And if there are no further corrections in the channel, then we would go forward from here. But we thought that we'd go a little bit lower in terms of months on hand in the channel. So it's a little bit higher than we had anticipated, but that's totally up to the wholesale and retail customers at this point.

[Scott Henry:]

Okay. And if we look at the sequential gain in U.S. sales from Q2 to Q3, is the large bulk of that gain all coming from IXINITY?

[Kenneth d'Entremont:]

Yes, absolutely. So Metoject is mature. We hold very strong market share there. I think we're like 80%. So it's basically flat on a unit basis, a slight increase, and a little bit down in dollars as we protect our share. So yes, all of the gain that was realized came from IXINITY.

[Marcel Konrad:]

Maybe, Scott, since you asked for the Q2 over the Q3 variant, is that correct here? That was your question?

[Scott Henry:]

Yes.

[Marcel Konrad:]

Yes, so that is the majority, as Ken mentioned, is from the -- it's from the top line. We've also been very consistent in saying that we produced and we stopped obviously the spend from the launch. So we see, if you look at our operating expenses, for example Q3 over Q2, that also decreased, which is the fact that that contributed to an increased EBITDA this quarter, yes.

[Scott Henry:]

Okay. Now given that you had this $2 million order in Q3, how should we think about fourth quarter? I know the trends are going in the higher direction, but do you think Q4 could be as strong as Q3? And should we think about positive EBITDA as a continuing event or more of a onetime event?

[Kenneth d'Entremont:]

Yes. We're obviously heading in the right direction, and we're anticipating that -- I think we had kind of thought we'd be breakeven this quarter and then positive next quarter. It may be the inverse. If the channel further corrects, then we might have a breakeven quarter this quarter, maybe a little bit down, a little bit up. It really depends on where the channel settles. The good news is that there are no incentives, so we're selling all the IXINITY at normal pricing, which is great. It helps the margins. We think we're near where the channel should be, but the channel will determine exactly where it wants to be. So it's hard to call this quarter. I think the good news and direction I would give is that the factory sales matched demand this quarter.

[Scott Henry:]

Okay. Great. And final question on the balance sheet. Current portion of long-term debt is a sizable number, but I know there's a lot of noise in that. Do you have any debt that you expect to be due within the next 12 months? And maybe you could give some color around that.

[Kenneth d'Entremont:]

I'll let Marcel take care of that.

[Marcel Konrad:]

Yes, Scott, good question. And it's a bit difficult to decipher footnotes on this particular $18 million. A huge majority of this is our ABL, the asset-based loan, which is the revolver that is going in there that obviously is not within the 12 months. And then we have $4 million or so start accumulating the true debts that we have to repay in the next 12 months.

[Operator:]

You do have an e-mail question from [ Thomas Newman ], and Thomas asks

[Kenneth d'Entremont:]

It's a good question. It depends on the circumstances. Obviously, we had believed that the FDA approval of treosulfan would have been a good catalyst for upgrading to a major U.S. exchange. We still believe that's the case, and we're evaluating those options.

[Operator:]

Your next question is coming from Prasath Pandurangan.

[Prasath Pandurangan:]

I'm from Bloom Burton. My first one relates to the impact of IXINITY. What's the target gross margin once the channel inventory is completely normalized and the manufacturing process improvements are fully in place?

[Kenneth d'Entremont:]

Great question. Complicated answer. The gross margin obviously improved probably points as a result of withdrawing the discounts. The improvement in cost of goods is far more difficult to forecast. We're on a very good trajectory. We're seeing nice improvements. And those will be realized as we go forward. It's a long manufacturing process for IXINITY. Remember, it's a biologic product, so it takes a long time to make it. And so the improvements that we're seeing are as a result of the work we've been doing over the last year, and it's now starting to be realized and will continue to be realized as you go forward. The target is real ambiguous in that we don't know the improvement that each of the steps will make. We've been pleasantly surprised that the improvements we've made so far have exceeded expectations. The yields have gone up more than we expected. And so we've had very good impact with the money that we spent so far and the work that our U.S. team has done, which has been excellent so far. And so it's hard to forecast how much better it will get, but we're confident it will get better.

[Prasath Pandurangan:]

Okay. That sounds good. And then I had -- as you look at potential capital raise for milestone payments as well as the eventual launch of treosulfan in the U.S., how do you see the market changing over the past year? And how do you plan to overcome any potential challenges?

[Kenneth d'Entremont:]

I think I'll turn that over to Marcel.

[Marcel Konrad:]

Yes, Prasath. Thanks for that question. So we have obviously a lot going on right now with our base business. Ken alluded to business development. We're looking at launching product. With the dynamics, per se, obviously if you look at the past versus where we are right now, it hasn't really fundamentally changed specifically with the share price we had up to now. Now obviously, we're looking at this a little bit short, mid and long term now, the short term where, as you've seen now, we have about $10 million of available liquidity. And now we're looking into the next step, sort of the midterm phase here up to the FDA approval, FDA decision ultimately then to say after the decision point, we have a long-term view on this rate, as you mentioned, on the milestone payments and so forth. So we look at various financing strategies within those periods, and we'll be tackling them over the next few quarters.

[Operator:]

Your next question is coming from Justin Keywood.

[Justin Keywood:]

Stifel. Nice to see the base business stabilize in the quarter. On the resubmission of treosulfan, what determines the FDA response being 2 months versus 6 months?

[Kenneth d'Entremont:]

Yes. Good question, Justin. It's totally up to the FDA, and it's dependent on the amount of material that they need to review. We're planning for the worst, which is the 6 months. And it's either 2 or 6. It's not really anything in between, probably. We're assuming it's going to be 6. That would put us out at October decision point. But it could be 2. We will know 30 days after resubmission. So they will tell us whether it's Type 1 or Type 2 30 days after resubmission. So we will communicate that once we know.

[Justin Keywood:]

Okay. And the resubmission is in Q2. Any indication when in Q2, or difficult to say?

[Kenneth d'Entremont:]

We think it's early Q2. medac is obviously the party responsible for preparing it. We're reviewing and involved with it, but they are the party preparing it. We think very early Q2. We had previously said I think at the very beginning when we first got the CRL that they we're shooting for end of Q1. It looks like it's beginning of Q2. And again, as soon as we put it in, we will announce that.

[Justin Keywood:]

And what indicators are you looking for to resume some increased spending in anticipation to launch treosulfan? Would that happen perhaps if it's a 2-month or a 6-month review, or how are you planning that?

[Kenneth d'Entremont:]

Yes. Again, great question. So I'll first remind you that we are carrying spending associated with treosulfan now; the medical team, the MSLs, some ITTs, investigator-initiated trials. So there is treo spending that's in our numbers. We will initiate the sales force after a decision. So that's the big spending. And we've said previously that we're anticipating about 16 reps, 1-6, to support treosulfan commercialization. And so that spending will not happen until we get a decision. We have some months before a commercial product is available. So we have time between the decision and availability of product in order to establish the sales force, and that's the plan.

[Justin Keywood:]

Seems like a prudent strategy.

[Operator:]

Your next question is coming from [ Simon Jerry ].

[Unknown Analyst:]

This is [ Simon Care ] from Raymond James. My question was regarding the margin you are experiencing with IXINITY. So what I understand is that you changed the manufacturing process. Can you talk about that?

[Kenneth d'Entremont:]

Sure. So just to be clear -- yes. Just to be clear, we haven't changed the process. We're improving the process. So these are all small incremental improvements that when you layer one on top of another start to make a difference, and so that's what we're doing. It's really hard to quantify the improvement. I mean I'll turn it over to Marcel. We're seeing small improvements in some of the SKUs, and we anticipate that to get better as we go forward. And so there is a percentage improvement, probably single digit in cost of goods so far, and we expect that to continue to grow as we go forward. Marcel, is there any more color you can add to that?

[Marcel Konrad:]

Yes, maybe as I mentioned, we've just now seen this quarter, for example, initial -- it's a long process, obviously, that with the biologics product, we've seen initial encouraging results. And maybe the question around gross margin versus the improvements versus the overall stability is an important one as you had -- maybe you noticed, for example this quarter, we had earlier this year, we had to put a reserve for batches, which now has been turned out to be because of this project where we seem to be in a more stable environment. So it's not only -- these investments are not only about targeting obviously the gross margins, but stabilizing the product, product stability. And hence, then we don't want to see these reserves, which as you have seen this quarter, we haven't done. So it's a 2-sided view on this. One obviously a direct impact on the financial statements when you talk about gross margin. But the other one is really targeting on the overall manufacturing process to make sure that we see these products coming through the manufacturing process in a way want to see them through and don't have to assess results.

[Operator:]

Your next question is coming from [ Alan Firth ].

[Unknown Attendee:]

Private investor. I've got 2 questions, if that's okay. The first one is just on IXINITY. Are you able to confirm what the end user demand growth was over the last 12 months? I appreciate it's been tricky with covid, but what are your thoughts on the prospects of getting back to kind of the prior growth levels? And then I've got one on Rasuvo afterwards.

[Kenneth d'Entremont:]

Yes. So the IXINITY demand is primarily made up of existing customers. So we've got a strong base of customers that have been with us for a long time, so that's very, very stable. The challenging piece is new patient growth, which became more challenging with the initiation of COVID because the face-to-face visits just aren't happening. So the growth I would estimate to be in the high-single digit, low-double digit sort of growth over the period, over the 12 months, and quarter-to-quarter it fluctuates. But I think the good news for us is that we've got a very stable base of existing business that is quite easy to project in terms of demand.

[Unknown Attendee:]

That's very helpful. And then just on Rasuvo, I saw [ atrexa ] being acquired by [ Asertiae ]. And I was just -- I just want it to be a basic question, but they had 12 months revenue of about $15 million. My understanding was that Rasuvo was some, not describing exactly, but being somewhere around $30 million rate. And I just can't quite relate the 2 if Rasuvo has an 80% market share and atrexa is obviously much, much smaller. So if you kind of explain why I'm messing that up, that would be really helpful.

[Kenneth d'Entremont:]

Yes. So when we quote the market share, we are quoting prescriptions. So that's demand really units. And so the dollar value shares may be different depending on pricing.

[Unknown Attendee:]

Okay. So you're essentially a much lower priced product, is that the right take?

[Kenneth d'Entremont:]

I think by those measures, yes, we're a little bit lower. Therefore, we'd have a lower share of dollar volume and much higher share of unit volume.

[Unknown Attendee:]

Okay. I guess that's a good position to be in.

[Operator:]

[Operator Instructions] There are no questions in queue at this time.

[Kenneth d'Entremont:]

Great. Well thank you, everyone, for joining us on the call today. Despite the challenging start to fiscal '22, we are confident Medexus has now turned a corner with the IXINITY supply chain process changes we are making and we're back to a positive growth trajectory. We're pleased with the clarity provided in the Type A meeting on treosulfan resubmission and expect the FDA decision later this calendar year. We do anticipate that we will continue to execute our business strategy, and we're in a good place to do that. I'm looking forward to future updates. Thanks very much for tuning in.

[Operator:]

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.